☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Virginia
|
|
26-2018846
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
500 Volvo Parkway
|
|
|
|
Chesapeake,
|
Virginia
|
|
23320
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $.01 per share
|
DLTR
|
NASDAQ Global Select Market
|
Yes
|
☒
|
No
|
☐
|
Yes
|
☐
|
No
|
☒
|
Yes
|
☒
|
No
|
☐
|
Yes
|
☒
|
No
|
☐
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
☐
|
Yes
|
☐
|
No
|
☒
|
|
|
Page
|
|
PART I
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
PART II
|
|
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
|
PART III
|
|
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
|
PART IV
|
|
|
|
|
Item 15.
|
||
Item 16.
|
||
|
•
|
the potential effect of general business or economic conditions (including inflation) on our costs and profitability, including the potential effect of future changes in prevailing wage rates and overtime regulations and our plans to address these changes, shipping rates, freight and other distribution costs, fuel costs and wage and benefit costs, consumer spending levels, and population, employment and job growth and/or losses in our markets;
|
•
|
the uncertainty of the impact of the coronavirus identified as COVID-19, including whether we will be or remain designated an “essential business” and otherwise be able to keep stores open;
|
•
|
the actual and potential effect of Section 301 tariffs on Chinese goods imposed by the United States Trade Representative, some of which were suspended or reduced in January and February 2020, and other potential impediments to imports;
|
•
|
our growth plans, including our plans to add, renovate, re-banner, expand, remodel, relocate or close stores and any related costs or charges, our anticipated square footage increase, our leasing strategy for future expansion, and our ability to renew leases at existing store locations;
|
•
|
the ability to retain key personnel and attract new personnel at Family Dollar and Dollar Tree and the performance of those personnel;
|
•
|
our anticipated sales, comparable store net sales, net sales growth, gross profit margin, costs of goods sold (including product mix), shrink rates, earnings and earnings growth, inventory levels, selling, general and administrative and other fixed costs, and our ability to leverage those costs;
|
•
|
the expected and possible outcome, costs, and impact of pending or potential litigation, arbitrations, other legal proceedings or governmental investigations (including the recent allegation by the Food and Drug Administration);
|
•
|
the effect of changes in labor laws, and the effect of the Fair Labor Standards Act as it relates to the qualification of our managers for exempt status, minimum wage and health care law;
|
•
|
the average size and productivity of our stores, including those to be added in 2020 and beyond;
|
•
|
the effect of our initiatives to renovate Family Dollar stores to the H2 store format and the performance of that format, the sales mix of consumable and higher margin merchandise in Dollar Tree and Family Dollar stores, including an increase in the number of stores with freezers and coolers, and the roll-out of adult beverages and Snack Zone, on our results of operations;
|
•
|
the net sales per square foot, net sales and operating income of our stores;
|
•
|
the benefits, results and effects of the Family Dollar acquisition and integration and the combined Company’s plans, objectives, strategies and expectations (financial or otherwise), including synergies, the cost to achieve synergies, and the effect on earnings per share;
|
•
|
the effect of changes in tax laws and regulatory interpretations of such laws;
|
•
|
our seasonal sales patterns including those relating to the length of the holiday selling seasons;
|
•
|
the capabilities of our inventory supply chain technology and other systems;
|
•
|
the reliability of, and cost associated with, our sources of supply, particularly imported goods such as those sourced from China;
|
•
|
the capacity, performance and cost of our distribution centers and distribution network (including shipping and transportation), including future automation, and our expectations regarding the construction of new distribution centers;
|
•
|
our expectations regarding our dividend policy and stock buy-backs;
|
•
|
our cash needs, including our ability to fund our future capital expenditures, working capital requirements and repurchases of common stock under our repurchase program, and our ability to service our debt obligations, including our expected annual interest expense;
|
•
|
our expectations regarding competition, growth in our retail sector and our potential for long-term growth;
|
•
|
our assessment of the materiality and impact on our business of recent accounting pronouncements adopted by the Financial Accounting Standards Board;
|
•
|
our assessment of the impact on the Company of certain actions by activist shareholders and the Company’s potential responses to these actions;
|
•
|
management’s estimates and expectations as they relate to income tax liabilities, deferred income taxes and uncertain tax positions; and
|
•
|
management’s estimates associated with our critical accounting policies, including inventory valuation, self-insurance liabilities and valuations for our goodwill and indefinite-lived intangible assets impairment analyses.
|
•
|
variety merchandise, which includes toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, and other items; and
|
•
|
growing and improving both the Dollar Tree and Family Dollar brands;
|
•
|
maintaining customer relevance by ensuring that we reinvent ourselves constantly through new merchandise categories and initiatives;
|
•
|
leveraging the complementary merchandise expertise of each segment including Dollar Tree’s sourcing and product development expertise and Family Dollar’s consumer package goods and national brands sourcing expertise; and
|
•
|
Shipping disruption. Our oceanic shipping schedules and shipping capacity may be disrupted or delayed from time to time. One factor that may have an impact in 2020 is the outbreak and spread of the coronavirus identified as COVID-19, which presents a risk to trans-Pacific shipping. The coronavirus, which has resulted in an epidemic and travel restrictions, originated and is concentrated in China, where we buy a significant portion of our merchandise. Our supply chain may be disrupted, or our transportation costs might increase, as a result of the coronavirus as well as other international events such as war or acts of terrorism.
|
•
|
Shipping costs. We could experience increases in shipping rates imposed by the trans-Pacific ocean carriers. Changes in import duties, import quotas and other trade sanctions could also increase our costs. We are also experiencing higher import freight costs based on the commencement of low sulphur fuel requirements for ships.
|
•
|
Efficient operations and management. Distribution centers and other aspects of our distribution network are difficult to operate efficiently, and we have and could experience a reduction in operating efficiency as a result of high turnover and challenges in maintaining a stable workforce. We are in the process of enhancing our distribution and logistics management to cope with our challenges, but have not completed that process.
|
•
|
Diesel fuel costs. We have experienced volatility in diesel fuel costs over the past few years.
|
•
|
Trucking costs. We have recently experienced significant increases in trucking costs due to the truck driver shortage and other factors in 2018, which abated in the fourth quarter of 2019; however, not to the extent anticipated, and our future trucking costs could be higher than we anticipate.
|
•
|
Vulnerability to natural or man-made disasters. A fire, explosion or natural disaster at a port or any of our distribution facilities could result in a loss of merchandise and impair our ability to adequately stock our stores. Some facilities are vulnerable to earthquakes, hurricanes or tornadoes.
|
•
|
Labor disagreement. Labor disagreements, disruptions or strikes, for example at ports, may result in delays in the delivery of merchandise to our distribution centers or stores and increase costs.
|
•
|
McLane Company, Inc. In fiscal 2019, we purchased and delivered approximately 14% of our merchandise for our Family Dollar segment through our relationship with McLane Company, Inc., which distributes consumable merchandise from multiple manufacturers. A disruption in our relationship with McLane Company, Inc. could have a significant near-term impact on our operations.
|
•
|
duties, tariffs or other restrictions on trade including Section 301 tariffs that have already been imposed on imported Chinese goods; the Section 301 tariffs that have already been assessed are expected to increase merchandise costs significantly in the first two quarters of 2020, but merchandise costs in the last two quarters of 2020 are expected to be affected similarly to the last two quarters of 2019;
|
•
|
raw material shortages, work stoppages, government travel restrictions, strikes and political unrest, including any impact on vendors or shipping arising from epidemics and related travel restrictions, such as the recent coronavirus COVID-19 pandemic;
|
•
|
economic crises and international disputes or conflicts;
|
•
|
changes in currency exchange rates or policies and local economic conditions, including inflation (including energy prices and raw material costs) in the country of origin;
|
•
|
potential changes to, or withdrawal of the United States from, international trade agreements or the failure of the United States to maintain normal trade relations with China and other countries;
|
•
|
changes in leadership and the political climate in countries from which we import products and their relations with the United States; and
|
•
|
failure of manufacturers outside the United States to meet food, drug and cosmetic safety and labeling requirements set by government regulators.
|
•
|
limiting our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes;
|
•
|
requiring a substantial portion of our cash flows to be dedicated to debt service payments, instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;
|
•
|
limiting our ability to refinance our indebtedness on terms acceptable to us or at all;
|
•
|
imposing restrictive covenants on our operations;
|
•
|
placing us at a competitive disadvantage to competitors carrying less debt; and
|
•
|
making us more vulnerable to economic downturns and limiting our ability to withstand competitive pressures.
|
•
|
incur, assume or guarantee additional indebtedness;
|
•
|
declare or pay dividends or make other distributions with respect to, or purchase or otherwise acquire or retire for value, equity interests;
|
•
|
make loans, advances or other investments;
|
•
|
incur liens;
|
•
|
sell or otherwise dispose of assets, including capital stock of subsidiaries;
|
•
|
enter into sale and lease-back transactions;
|
•
|
consolidate or merge with or into, or sell all or substantially all of our assets to, another person; and
|
•
|
enter into transactions with affiliates.
|
•
|
limited in how we conduct our business;
|
•
|
unable to raise additional debt or equity financing to operate during general economic or business downturns; or
|
•
|
unable to compete effectively, take advantage of new business opportunities or grow in accordance with our plans.
|
•
|
provide that only the Board of Directors, the chairman of the Board or the chief executive officer may call special meetings of the shareholders;
|
•
|
establish certain advance notice procedures for nominations of candidates for election as directors and for shareholder proposals to be considered at shareholders’ meetings; and
|
•
|
permit the Board of Directors, without further action of the shareholders, to issue and fix the terms of preferred stock, which may have rights senior to those of the common stock.
|
•
|
employment-related matters;
|
•
|
infringement of intellectual property rights;
|
•
|
personal injury/wrongful death claims;
|
•
|
real estate matters;
|
•
|
environmental and safety issues; and
|
•
|
product safety matters, which may include regulatory matters.
|
|
Year Ended
|
|||||||||||||||||
|
January 31, 2015
|
January 30, 2016
|
January 28, 2017
|
February 3, 2018
|
February 2, 2019
|
February 1, 2020
|
||||||||||||
Dollar Tree, Inc.
|
$
|
100.00
|
|
$
|
114.37
|
|
$
|
104.15
|
|
$
|
153.07
|
|
$
|
135.99
|
|
$
|
122.46
|
|
S&P 500 Index
|
100.00
|
|
99.33
|
|
119.24
|
|
150.73
|
|
147.24
|
|
179.17
|
|
||||||
S&P Retailing Index
|
100.00
|
|
118.07
|
|
140.38
|
|
203.32
|
|
216.05
|
|
253.36
|
|
|
Year Ended
|
||||||||||||||||||
|
February 1,
2020 |
|
February 2,
2019 |
|
February 3,
2018 |
|
January 28,
2017 |
|
January 30,
2016 |
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
23,610.8
|
|
|
$
|
22,823.3
|
|
|
$
|
22,245.5
|
|
|
$
|
20,719.2
|
|
|
$
|
15,498.4
|
|
Gross profit
|
7,040.7
|
|
|
6,947.5
|
|
|
7,021.9
|
|
|
6,394.7
|
|
|
4,656.7
|
|
|||||
Selling, general and administrative expenses
|
5,778.5
|
|
|
7,887.0
|
|
|
5,022.8
|
|
|
4,689.9
|
|
|
3,607.0
|
|
|||||
Operating income (loss)
|
1,262.2
|
|
|
(939.5
|
)
|
|
1,999.1
|
|
|
1,704.8
|
|
|
1,049.7
|
|
|
Year Ended
|
||||||||||||||||||
|
February 1,
2020 |
|
February 2,
2019 |
|
February 3,
2018 |
|
January 28,
2017 |
|
January 30,
2016 |
||||||||||
Net income (loss)
|
827.0
|
|
|
(1,590.8
|
)
|
|
1,714.3
|
|
|
896.2
|
|
|
282.4
|
|
|||||
Margin Data (as a percentage of net sales):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
29.8
|
%
|
|
30.4
|
%
|
|
31.6
|
%
|
|
30.8
|
%
|
|
30.1
|
%
|
|||||
Selling, general and administrative expenses
|
24.5
|
%
|
|
34.5
|
%
|
|
22.6
|
%
|
|
22.6
|
%
|
|
23.3
|
%
|
|||||
Operating income (loss)
|
5.3
|
%
|
|
(4.1
|
)%
|
|
9.0
|
%
|
|
8.2
|
%
|
|
6.8
|
%
|
|||||
Net income (loss)
|
3.5
|
%
|
|
(7.0
|
)%
|
|
7.7
|
%
|
|
4.3
|
%
|
|
1.8
|
%
|
|||||
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted net income (loss) per share(1)
|
$
|
3.47
|
|
|
$
|
(6.69
|
)
|
|
$
|
7.21
|
|
|
$
|
3.78
|
|
|
$
|
1.26
|
|
Diluted net income (loss) per share increase
(decrease)
|
151.9
|
%
|
|
(192.8
|
)%
|
|
90.7
|
%
|
|
200.0
|
%
|
|
(56.6
|
)%
|
|
As of
|
||||||||||||||||||
|
February 1,
2020 |
|
February 2,
2019 |
|
February 3,
2018 |
|
January 28,
2017 |
|
January 30,
2016 |
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents and short-term investments
|
$
|
539.2
|
|
|
$
|
422.1
|
|
|
$
|
1,097.8
|
|
|
$
|
870.4
|
|
|
$
|
740.1
|
|
Working capital
|
722.9
|
|
|
2,197.6
|
|
|
1,717.2
|
|
|
1,832.1
|
|
|
1,840.5
|
|
|||||
Total assets
|
19,574.6
|
|
|
13,501.2
|
|
|
16,332.8
|
|
|
15,701.6
|
|
|
15,901.2
|
|
|||||
Total debt
|
3,800.0
|
|
|
4,300.0
|
|
|
5,732.7
|
|
|
6,391.8
|
|
|
7,465.5
|
|
|||||
Total operating lease liabilities
|
6,258.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shareholders’ equity
|
6,254.8
|
|
|
5,642.9
|
|
|
7,182.3
|
|
|
5,389.5
|
|
|
4,406.9
|
|
|
Year Ended
|
||||||||||||||||||
|
February 1,
2020 |
|
February 2,
2019 |
|
February 3,
2018 |
|
January 28,
2017 |
|
January 30,
2016 |
||||||||||
Selected Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Number of stores open at end of period
|
15,288
|
|
|
15,237
|
|
|
14,835
|
|
|
14,334
|
|
|
13,851
|
|
|||||
Dollar Tree
|
7,505
|
|
|
7,001
|
|
|
6,650
|
|
|
6,360
|
|
|
5,954
|
|
|||||
Family Dollar
|
7,783
|
|
|
8,236
|
|
|
8,185
|
|
|
7,974
|
|
|
7,897
|
|
|||||
Gross square footage at end of period
|
149.8
|
|
|
148.3
|
|
|
143.9
|
|
|
138.8
|
|
|
132.1
|
|
|||||
Dollar Tree
|
80.6
|
|
|
75.4
|
|
|
71.6
|
|
|
68.5
|
|
|
64.2
|
|
|||||
Family Dollar
|
69.2
|
|
|
72.9
|
|
|
72.3
|
|
|
70.3
|
|
|
67.9
|
|
|||||
Selling square footage at end of period
|
121.3
|
|
|
120.1
|
|
|
116.6
|
|
|
112.4
|
|
|
108.4
|
|
|||||
Dollar Tree
|
64.6
|
|
|
60.3
|
|
|
57.3
|
|
|
54.7
|
|
|
51.3
|
|
|||||
Family Dollar
|
56.7
|
|
|
59.8
|
|
|
59.3
|
|
|
57.7
|
|
|
57.1
|
|
|||||
Selling square footage annual growth(3)
|
1.0
|
%
|
|
3.0
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
|
10.3
|
%
|
|||||
Net sales annual growth(2)
|
3.5
|
%
|
|
2.6
|
%
|
|
7.4
|
%
|
|
8.6
|
%
|
|
8.5
|
%
|
|||||
Comparable store net sales increase(2)
|
1.8
|
%
|
|
1.7
|
%
|
|
1.9
|
%
|
|
1.8
|
%
|
|
2.1
|
%
|
|||||
Net sales per selling square foot(3)
|
$
|
196
|
|
|
$
|
193
|
|
|
$
|
194
|
|
|
$
|
188
|
|
|
$
|
191
|
|
Net sales per store(3)
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
1.6
|
|
Selected Financial Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Return on assets(3)
|
5.0
|
%
|
|
(10.7
|
)%
|
|
10.7
|
%
|
|
5.7
|
%
|
|
11.4
|
%
|
|||||
Return on equity(3)
|
13.9
|
%
|
|
(24.8
|
)%
|
|
27.3
|
%
|
|
18.3
|
%
|
|
31.5
|
%
|
|||||
Inventory turns(3)
|
4.0
|
|
|
4.1
|
|
|
4.4
|
|
|
4.1
|
|
|
4.5
|
|
•
|
Coronavirus Pandemic
|
◦
|
In March 2020, infections of the coronavirus COVID-19 had become pandemic with persons testing positive in all fifty states and the District of Columbia. With the possibility of widespread infection in the United States and abroad, national, state and local authorities have recommended social distancing and imposed or are considering quarantine and isolation measures on large portions of the population, including mandatory business closures. The Company has been classified as an essential business in certain jurisdictions that have decided that issue to date, and we have been allowed to remain open. However, we can give no assurance that that will not change in the future and we may also be forced to close stores or other facilities for other reasons such as the health of our associates or because of disruptions in the continued operation of our supply chain and sources of supply. Other economic effects of the COVID-19 pandemic are difficult to predict and may adversely impact our results of operations or business condition.
|
•
|
Integration of Family Dollar
|
◦
|
In 2018, based on our strategic and operational reassessment of the Family Dollar segment following challenges that the business experienced that impacted our ability to grow the business at the originally estimated rate when we acquired Family Dollar in 2015, management determined there were indicators that the goodwill of the business may be impaired. Accordingly, a goodwill impairment test was performed in the fourth quarter of fiscal 2018 and we performed our annual impairment test in 2019. The results of the impairment tests showed that the fair value of the Family Dollar reporting unit was lower than its carrying value resulting in $313.0 million and $2.73 billion non-cash pre-tax and after-tax goodwill impairment charges in the fourth quarters of fiscal 2019 and 2018, respectively.
|
◦
|
In March 2019, we announced plans for a store optimization program for Family Dollar. For fiscal 2019, this program included rolling out a new model for both new and renovated Family Dollar stores, internally known as H2, re-bannering selected stores to the Dollar Tree brand, closing under-performing stores, and installing adult beverages and expanding freezers and coolers in selected stores. We plan to continue to roll out the H2 concept to more stores, increase the number of stores with adult beverages and expand freezers and coolers in selected stores in 2020.
|
◦
|
In fiscal 2019, we substantially completed our consolidation of our store support centers in Matthews, North Carolina and Chesapeake, Virginia to our Summit Pointe development in Chesapeake, Virginia.
|
•
|
Supply Chain
|
◦
|
In the third quarter of 2018, we opened a new 1.2 million square foot distribution center in Warrensburg, Missouri.
|
◦
|
In the third quarter of 2019, we opened a new 1.2 million square foot distribution center in Morrow County, Ohio.
|
◦
|
In fiscal 2019, we began construction of a new 1.2 million square foot distribution center in Rosenberg, Texas which is expected to be operational in the third quarter of 2020.
|
◦
|
In fiscal 2019, we announced plans to construct a new high velocity distribution center in Ocala, Florida that will provide service directly to Dollar Tree and Family Dollar stores throughout Florida and parts of the Southeast and will be built in two phases eventually comprising a 1.7 million square foot facility.
|
•
|
Long-term Debt
|
◦
|
During the first quarter of 2018, we redeemed our $750.0 million acquisition notes and accelerated the amortization of debt-issuance costs associated with the notes of $6.1 million.
|
◦
|
During the first quarter of 2018, we refinanced our long-term debt obligations as follows:
|
▪
|
We completed the registered offering of $750.0 million of Senior Floating Rate Notes due 2020, $1.0 billion of 3.70% Senior Notes due 2023, $1.0 billion of 4.00% Senior Notes due 2025 and $1.25 billion of 4.20% Senior Notes due 2028;
|
▪
|
We entered into a credit agreement for a $782.0 million term loan facility and a $1.25 billion revolving credit facility;
|
▪
|
We used the proceeds of the above offerings to repay the $2,182.7 million outstanding under our senior secured credit facilities and redeem the remaining $2,500.0 million outstanding under our acquisition debt, resulting in the acceleration of the expensing of $41.2 million of deferred financing costs and the incurrence of $114.3 million in prepayment penalties.
|
◦
|
During the fourth quarter of 2018, we prepaid the $782.0 million outstanding under the term loan facility and accelerated the expensing of $1.5 million of deferred financing costs.
|
◦
|
During the fourth quarter of 2019, we prepaid $500.0 million of the $750.0 million Senior Floating Rate Notes due 2020 and accelerated the expensing of $0.3 million of deferred financing costs.
|
|
Year Ended
|
||||||||||||||||
|
February 1, 2020
|
|
February 2, 2019
|
||||||||||||||
|
Dollar Tree
|
|
Family Dollar
|
|
Total
|
|
Dollar Tree
|
|
Family Dollar
|
|
Total
|
||||||
Store Count:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning
|
7,001
|
|
|
8,236
|
|
|
15,237
|
|
|
6,650
|
|
|
8,185
|
|
|
14,835
|
|
New stores
|
348
|
|
|
170
|
|
|
518
|
|
|
320
|
|
|
226
|
|
|
546
|
|
Re-bannered stores
|
200
|
|
|
(200
|
)
|
|
—
|
|
|
52
|
|
|
(53
|
)
|
|
(1
|
)
|
Closings
|
(44
|
)
|
|
(423
|
)
|
|
(467
|
)
|
|
(21
|
)
|
|
(122
|
)
|
|
(143
|
)
|
Ending
|
7,505
|
|
|
7,783
|
|
|
15,288
|
|
|
7,001
|
|
|
8,236
|
|
|
15,237
|
|
Relocations
|
47
|
|
|
15
|
|
|
62
|
|
|
54
|
|
|
13
|
|
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling Square Feet (in millions):
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beginning
|
60.3
|
|
|
59.8
|
|
|
120.1
|
|
|
57.3
|
|
|
59.3
|
|
|
116.6
|
|
New stores
|
3.0
|
|
|
1.3
|
|
|
4.3
|
|
|
2.7
|
|
|
1.7
|
|
|
4.4
|
|
Re-bannered stores
|
1.5
|
|
|
(1.5
|
)
|
|
—
|
|
|
0.4
|
|
|
(0.4
|
)
|
|
—
|
|
Closings
|
(0.4
|
)
|
|
(2.9
|
)
|
|
(3.3
|
)
|
|
(0.2
|
)
|
|
(0.8
|
)
|
|
(1.0
|
)
|
Relocations
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
Ending
|
64.6
|
|
|
56.7
|
|
|
121.3
|
|
|
60.3
|
|
|
59.8
|
|
|
120.1
|
|
•
|
The Office of the United States Trade Representative (USTR) previously imposed tariffs under Section 301 against Chinese goods described on Lists 1, 2, and 3 at a rate of 25%. On September 1, 2019, goods described on List 4A became subject to tariffs at the rate of 15%. On February 14, 2020, the tariff rate on List 4A goods declined to 7.5%.
|
•
|
During 2019 we were able to negotiate price concessions from vendors on certain products, cancel orders, change product sizes and specifications, change our product mix and change vendors in order to mitigate most of the potential adverse effects of the tariffs under Lists 1, 2 and 3 on the Dollar Tree and Family Dollar segments through January 2020. Due to the timing of the List 4A tariffs, we were not able to significantly mitigate these tariffs in 2019. As a result, in the fourth quarter of 2019, Section 301 tariffs increased our costs of goods sold by approximately $29.0 million.
|
•
|
We believe that the annualization of these tariffs under Section 301 will increase cost of goods sold in 2020 by approximately $47.0 million as compared to 2019, with the majority of this increase affecting the first half of 2020.
|
•
|
We will continue to assess the future impact of these tariffs. We can give no assurances as to the final scope, duration, or impact of any existing or future tariffs. The tariffs could have a material adverse effect on our business and results of operations in 2020.
|
•
|
We anticipate higher import freight costs continuing into 2020 based on our April 2019 rate negotiations and the commencement in January 2020 of low sulphur fuel requirements for ships.
|
•
|
We also anticipate higher promotional activity in the first quarter of 2020 in the Family Dollar segment as we rebuild our discretionary assortment.
|
|
|
Year Ended
|
|||||||
|
|
February 1,
2020 |
|
February 2,
2019 |
|
February 3,
2018 |
|||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
|
70.2
|
%
|
|
69.6
|
%
|
|
68.4
|
%
|
Gross profit
|
|
29.8
|
%
|
|
30.4
|
%
|
|
31.6
|
%
|
Selling, general and administrative expenses, excluding Goodwill
impairment and Receivable impairment
|
|
23.2
|
%
|
|
22.6
|
%
|
|
22.5
|
%
|
Goodwill impairment
|
|
1.3
|
%
|
|
11.9
|
%
|
|
—
|
%
|
Receivable impairment
|
|
—
|
%
|
|
—
|
%
|
|
0.1
|
%
|
Selling, general and administrative expenses
|
|
24.5
|
%
|
|
34.5
|
%
|
|
22.6
|
%
|
Operating income (loss)
|
|
5.3
|
%
|
|
(4.1
|
)%
|
|
9.0
|
%
|
Interest expense, net
|
|
0.6
|
%
|
|
1.6
|
%
|
|
1.3
|
%
|
Other income, net
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Income (loss) before income taxes
|
|
4.7
|
%
|
|
(5.7
|
)%
|
|
7.7
|
%
|
Provision for income taxes
|
|
1.2
|
%
|
|
1.3
|
%
|
|
—
|
%
|
Net income (loss)
|
|
3.5
|
%
|
|
(7.0
|
)%
|
|
7.7
|
%
|
•
|
Merchandise cost, including freight, increased approximately 25 basis points resulting from higher tariffs, higher freight costs, and higher sales of lower margin consumable merchandise, primarily in the Family Dollar segment, partially offset by improved initial mark-on.
|
•
|
Shrink costs increased approximately 15 basis points in 2019 due to unfavorable inventory results, primarily in the Family Dollar segment.
|
•
|
Distribution costs increased approximately 15 basis points resulting primarily from higher distribution center payroll costs and higher depreciation.
|
•
|
Occupancy costs increased approximately 10 basis points resulting from higher real estate tax expense.
|
•
|
Operating and corporate expenses increased approximately 40 basis points resulting from increased costs related to the consolidation of our store support centers, costs related to the disposal of fixed assets due to store closures in conjunction with the Family Dollar store optimization program, higher legal expenses and increased debit and credit fees resulting from higher penetration.
|
•
|
Payroll expenses increased approximately 15 basis points primarily due to average hourly rate increases and additional hours, including higher temporary help expenses, to support store-level initiatives. These increases were partially offset by decreased retirement plan contributions.
|
•
|
Merchandise cost, including freight, increased approximately 40 basis points primarily due to higher tariffs and higher freight costs, partially offset by improved initial mark-on.
|
•
|
Distribution costs increased approximately 10 basis points primarily due to higher distribution center payroll and depreciation costs.
|
•
|
Payroll expenses increased approximately 15 basis points due to higher store hourly payroll costs resulting from average hourly rate increases and additional hours to support store-level initiatives, partially offset by lower retirement plan expense.
|
•
|
Operating expenses increased approximately 10 basis points primarily due to increased debit and credit fees resulting from higher debit and credit card penetration in the current year.
|
|
|
Year Ended
|
|||||||||||||||||||
|
|
February 1, 2020
|
|
February 2, 2019
|
|
February 3, 2018
|
|||||||||||||||
(in millions)
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
|||||||||
Net sales
|
|
$
|
11,102.9
|
|
|
|
|
$
|
11,111.2
|
|
|
|
|
$
|
11,081.1
|
|
|
|
|||
Gross profit
|
|
2,697.8
|
|
|
24.3
|
%
|
|
2,810.0
|
|
|
25.3
|
%
|
|
3,023.4
|
|
|
27.3
|
%
|
|||
Operating income (loss)
|
|
(81.0
|
)
|
|
(0.7
|
)%
|
|
(2,320.0
|
)
|
|
(20.9
|
)%
|
|
630.0
|
|
|
5.7
|
%
|
•
|
Merchandise cost, including freight, increased approximately 40 basis points, primarily due to higher sales of lower margin consumable merchandise and higher freight costs, partially offset by higher initial mark-on.
|
•
|
Shrink costs increased approximately 30 basis points resulting from unfavorable physical inventory results in the current year.
|
•
|
Distribution costs increased approximately 15 basis points resulting primarily from higher merchandising and distribution payroll-related costs.
|
•
|
Occupancy costs increased approximately 15 basis points resulting primarily from higher real estate tax expense.
|
•
|
Operating expenses increased approximately 45 basis points resulting primarily from higher costs related to the disposal of fixed assets in connection with the store optimization program, higher legal expenses, higher debit and credit fees resulting from higher debit and credit card penetration and higher store supplies expense to support the H2 initiative.
|
•
|
Payroll expenses increased approximately 15 basis points primarily due to average hourly rate increases and additional hours, including increased temporary help expenses, to support store-level initiatives, partially offset by lower insurance expenses.
|
|
|
Year Ended
|
||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
||||||
(in millions)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
1,869.8
|
|
|
$
|
1,766.0
|
|
|
$
|
1,510.2
|
|
Investing activities
|
|
(1,020.2
|
)
|
|
(816.7
|
)
|
|
(627.9
|
)
|
|||
Financing activities
|
|
(709.8
|
)
|
|
(1,599.9
|
)
|
|
(651.5
|
)
|
Contractual Obligations
|
Total
|
2020
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
||||||||||||||
Lease Financing
|
|
|
|
|
|
|
|
||||||||||||||
Operating lease obligations
|
$
|
7,458.3
|
|
$
|
1,435.5
|
|
$
|
1,350.8
|
|
$
|
1,150.3
|
|
$
|
927.6
|
|
$
|
711.0
|
|
$
|
1,883.1
|
|
Long-term Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Principal
|
3,800.0
|
|
250.0
|
|
300.0
|
|
—
|
|
1,000.0
|
|
—
|
|
2,250.0
|
|
|||||||
Interest
|
784.7
|
|
145.4
|
|
129.2
|
|
129.7
|
|
104.2
|
|
92.0
|
|
184.2
|
|
|||||||
Total obligations
|
$
|
12,043.0
|
|
$
|
1,830.9
|
|
$
|
1,780.0
|
|
$
|
1,280.0
|
|
$
|
2,031.8
|
|
$
|
803.0
|
|
$
|
4,317.3
|
|
Commitments
|
Total
|
Expiring in 2020
|
Expiring in 2021
|
Expiring in 2022
|
Expiring in 2023
|
Expiring in 2024
|
Thereafter
|
||||||||||||||
Letters of credit and surety bonds
|
$
|
340.9
|
|
$
|
333.5
|
|
$
|
6.8
|
|
$
|
0.5
|
|
$
|
0.1
|
|
$
|
—
|
|
$
|
—
|
|
Purchase obligations
|
123.2
|
|
47.8
|
|
30.3
|
|
22.4
|
|
17.5
|
|
5.2
|
|
—
|
|
|||||||
Total commitments
|
$
|
464.1
|
|
$
|
381.3
|
|
$
|
37.1
|
|
$
|
22.9
|
|
$
|
17.6
|
|
$
|
5.2
|
|
$
|
—
|
|
•
|
The potential future revenue, EBITDA and cash flows of the reporting unit. The projections use management’s assumptions about economic and market conditions over the projected period as well as our estimates of future performance and reporting unit revenue, gross margin, expenses and other factors. The resulting revenue, EBITDA and cash flow estimates are based on our most recent business operating plans, and various growth rates have been assumed for years beyond the current business plan period. We believe that the assumptions, estimates and rates used in our fiscal 2019 impairment evaluations are reasonable; however, variations in the assumptions, estimates and rates could result in significantly different estimates of fair value.
|
•
|
Selection of an appropriate discount rate. Calculating the present value of future cash flows requires the selection of an appropriate discount rate, which is based on a weighted-average cost of capital analysis. The discount rate is affected by changes in short-term interest rates and long-term yield as well as variances in the typical capital structure of marketplace participants. Given current economic conditions, it is possible that the discount rate will fluctuate in the near term. We engaged third party experts to assist in the determination of the weighted-average cost of capital used to discount the
|
|
Page
|
|
|
•
|
evaluating the Company’s revenue growth rates and EBITDA margins based on publicly available market data for comparable entities;
|
•
|
assessing the Company’s discount rates and royalty rate by comparing the Company’s inputs to the discount and royalty rates to publicly available market data for comparable companies and assessing the resulting rates; and
|
•
|
evaluating (1) the Family Dollar operating segment’s fair value using the related cash flow forecast and discount rate, as well as (2) the trade name’s fair value using the related discount rate and royalty rate, and comparing the results to the Company’s fair value estimate.
|
•
|
assessing the Company’s actuarial methods by comparing them to generally accepted actuarial methodologies; and
|
•
|
evaluating the Company’s actuarial estimates and assumptions related to the loss development factors and expected loss rates, by comparing them to generally accepted actuarial methodologies and the Company’s historical data and trends.
|
|
|
Year Ended
|
||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
||||||
(in millions, except per share data)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net sales
|
|
$
|
23,610.8
|
|
|
$
|
22,823.3
|
|
|
$
|
22,245.5
|
|
Cost of sales
|
|
16,570.1
|
|
|
15,875.8
|
|
|
15,223.6
|
|
|||
Gross profit
|
|
7,040.7
|
|
|
6,947.5
|
|
|
7,021.9
|
|
|||
Selling, general and administrative expenses, excluding Goodwill
impairment and Receivable impairment
|
|
5,465.5
|
|
|
5,160.0
|
|
|
5,004.3
|
|
|||
Goodwill impairment
|
|
313.0
|
|
|
2,727.0
|
|
|
—
|
|
|||
Receivable impairment
|
|
—
|
|
|
—
|
|
|
18.5
|
|
|||
Selling, general and administrative expenses
|
|
5,778.5
|
|
|
7,887.0
|
|
|
5,022.8
|
|
|||
Operating income (loss)
|
|
1,262.2
|
|
|
(939.5
|
)
|
|
1,999.1
|
|
|||
Interest expense, net
|
|
162.1
|
|
|
370.0
|
|
|
301.8
|
|
|||
Other expense (income), net
|
|
1.4
|
|
|
(0.5
|
)
|
|
(6.7
|
)
|
|||
Income (loss) before income taxes
|
|
1,098.7
|
|
|
(1,309.0
|
)
|
|
1,704.0
|
|
|||
Provision for income taxes
|
|
271.7
|
|
|
281.8
|
|
|
(10.3
|
)
|
|||
Net income (loss)
|
|
$
|
827.0
|
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
Basic net income (loss) per share
|
|
$
|
3.49
|
|
|
$
|
(6.69
|
)
|
|
$
|
7.24
|
|
Diluted net income (loss) per share
|
|
$
|
3.47
|
|
|
$
|
(6.69
|
)
|
|
$
|
7.21
|
|
|
|
Year Ended
|
||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
||||||
(in millions)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net income (loss)
|
|
$
|
827.0
|
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
(1.5
|
)
|
|
(6.0
|
)
|
|
5.3
|
|
|||
|
|
|
|
|
|
|
||||||
Total comprehensive income (loss)
|
|
$
|
825.5
|
|
|
$
|
(1,596.8
|
)
|
|
$
|
1,719.6
|
|
(in millions, except share and per share data)
|
|
February 1, 2020
|
|
February 2, 2019
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
539.2
|
|
|
$
|
422.1
|
|
Merchandise inventories
|
|
3,522.0
|
|
|
3,536.0
|
|
||
Other current assets
|
|
208.2
|
|
|
335.2
|
|
||
Total current assets
|
|
4,269.4
|
|
|
4,293.3
|
|
||
Property, plant and equipment, net of accumulated depreciation of $4,194.1 and $3,690.6,
respectively
|
|
3,881.8
|
|
|
3,445.3
|
|
||
Restricted cash
|
|
46.8
|
|
|
24.6
|
|
||
Operating lease right-of-use assets
|
|
6,225.0
|
|
|
—
|
|
||
Goodwill
|
|
1,983.3
|
|
|
2,296.6
|
|
||
Favorable lease rights, net of accumulated amortization of $287.8 at February 2, 2019
|
|
—
|
|
|
288.7
|
|
||
Trade name intangible asset
|
|
3,100.0
|
|
|
3,100.0
|
|
||
Deferred tax asset
|
|
24.4
|
|
|
—
|
|
||
Other assets
|
|
43.9
|
|
|
52.7
|
|
||
Total assets
|
|
$
|
19,574.6
|
|
|
$
|
13,501.2
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Current portion of long-term debt
|
|
$
|
250.0
|
|
|
$
|
—
|
|
Current portion of operating lease liabilities
|
|
1,279.3
|
|
|
—
|
|
||
Accounts payable
|
|
1,336.5
|
|
|
1,416.4
|
|
||
Income taxes payable
|
|
62.7
|
|
|
60.0
|
|
||
Other current liabilities
|
|
618.0
|
|
|
619.3
|
|
||
Total current liabilities
|
|
3,546.5
|
|
|
2,095.7
|
|
||
Long-term debt, net, excluding current portion
|
|
3,522.2
|
|
|
4,265.3
|
|
||
Operating lease liabilities, long-term
|
|
4,979.5
|
|
|
—
|
|
||
Unfavorable lease rights, net of accumulated amortization of $76.9 at February 2, 2019
|
|
—
|
|
|
78.8
|
|
||
Deferred income taxes, net
|
|
984.7
|
|
|
973.2
|
|
||
Income taxes payable, long-term
|
|
28.9
|
|
|
35.4
|
|
||
Other liabilities
|
|
258.0
|
|
|
409.9
|
|
||
Total liabilities
|
|
13,319.8
|
|
|
7,858.3
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, par value $0.01; 600,000,000 shares authorized, 236,726,563 and
238,081,664 shares issued and outstanding at February 1, 2020 and February 2, 2019,
respectively
|
|
2.4
|
|
|
2.4
|
|
||
Additional paid-in capital
|
|
2,454.4
|
|
|
2,602.7
|
|
||
Accumulated other comprehensive loss
|
|
(39.8
|
)
|
|
(38.3
|
)
|
||
Retained earnings
|
|
3,837.8
|
|
|
3,076.1
|
|
||
Total shareholders’ equity
|
|
6,254.8
|
|
|
5,642.9
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
19,574.6
|
|
|
$
|
13,501.2
|
|
(in millions)
|
|
Common
Stock
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Share-
holders’
Equity
|
|||||||||||
Balance at January 28, 2017
|
|
236.1
|
|
|
$
|
2.4
|
|
|
$
|
2,472.1
|
|
|
$
|
(37.6
|
)
|
|
$
|
2,952.6
|
|
|
$
|
5,389.5
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,714.3
|
|
|
1,714.3
|
|
|||||
Total other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
5.3
|
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
0.2
|
|
|
—
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
|
8.4
|
|
|||||
Exercise of stock options
|
|
0.5
|
|
|
—
|
|
|
26.6
|
|
|
—
|
|
|
—
|
|
|
26.6
|
|
|||||
Stock-based compensation, net
|
|
0.5
|
|
|
—
|
|
|
38.2
|
|
|
—
|
|
|
—
|
|
|
38.2
|
|
|||||
Balance at February 3, 2018
|
|
237.3
|
|
|
2.4
|
|
|
2,545.3
|
|
|
(32.3
|
)
|
|
4,666.9
|
|
|
7,182.3
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,590.8
|
)
|
|
(1,590.8
|
)
|
|||||
Total other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
0.2
|
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|||||
Exercise of stock options
|
|
0.1
|
|
|
—
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|||||
Stock-based compensation, net
|
|
0.5
|
|
|
—
|
|
|
39.9
|
|
|
—
|
|
|
—
|
|
|
39.9
|
|
|||||
Balance at February 2, 2019
|
|
238.1
|
|
|
2.4
|
|
|
2,602.7
|
|
|
(38.3
|
)
|
|
3,076.1
|
|
|
5,642.9
|
|
|||||
Cumulative effect of adopted accounting
standards, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65.3
|
)
|
|
(65.3
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
827.0
|
|
|
827.0
|
|
|||||
Total other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
0.1
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
|||||
Exercise of stock options
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|||||
Stock-based compensation, net
|
|
0.4
|
|
|
—
|
|
|
36.5
|
|
|
—
|
|
|
—
|
|
|
36.5
|
|
|||||
Repurchase of stock
|
|
(1.9
|
)
|
|
—
|
|
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|
(200.0
|
)
|
|||||
Balance at February 1, 2020
|
|
236.7
|
|
|
$
|
2.4
|
|
|
$
|
2,454.4
|
|
|
$
|
(39.8
|
)
|
|
$
|
3,837.8
|
|
|
$
|
6,254.8
|
|
|
|
Year Ended
|
||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
||||||
(in millions)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
827.0
|
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Goodwill impairment
|
|
313.0
|
|
|
2,727.0
|
|
|
—
|
|
|||
Receivable impairment
|
|
—
|
|
|
—
|
|
|
18.5
|
|
|||
Depreciation and amortization
|
|
645.4
|
|
|
621.1
|
|
|
611.2
|
|
|||
Provision for deferred income taxes
|
|
9.1
|
|
|
(12.1
|
)
|
|
(473.5
|
)
|
|||
Stock-based compensation expense
|
|
61.4
|
|
|
63.1
|
|
|
65.7
|
|
|||
Amortization of debt discount and debt-issuance costs
|
|
6.9
|
|
|
57.2
|
|
|
15.4
|
|
|||
Other non-cash adjustments to net income (loss)
|
|
24.5
|
|
|
7.8
|
|
|
10.9
|
|
|||
Loss on debt extinguishment
|
|
—
|
|
|
114.7
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Merchandise inventories
|
|
13.6
|
|
|
(369.2
|
)
|
|
(300.9
|
)
|
|||
Other current assets
|
|
(8.4
|
)
|
|
(21.1
|
)
|
|
(117.2
|
)
|
|||
Other assets
|
|
8.2
|
|
|
0.9
|
|
|
2.6
|
|
|||
Accounts payable
|
|
(79.8
|
)
|
|
242.6
|
|
|
54.5
|
|
|||
Income taxes payable
|
|
2.7
|
|
|
28.5
|
|
|
(58.5
|
)
|
|||
Other current liabilities
|
|
24.3
|
|
|
(105.4
|
)
|
|
(22.7
|
)
|
|||
Other liabilities
|
|
(14.6
|
)
|
|
1.7
|
|
|
(10.1
|
)
|
|||
Operating lease right-of-use assets and liabilities, net
|
|
36.5
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by operating activities
|
|
1,869.8
|
|
|
1,766.0
|
|
|
1,510.2
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
|
(1,034.8
|
)
|
|
(817.1
|
)
|
|
(632.2
|
)
|
|||
Proceeds from governmental grant
|
|
16.5
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from (payments for) fixed asset disposition
|
|
(1.9
|
)
|
|
0.4
|
|
|
0.3
|
|
|||
Proceeds from sale of unrestricted investments
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|||
Net cash used in investing activities
|
|
(1,020.2
|
)
|
|
(816.7
|
)
|
|
(627.9
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from long-term debt, net of discount
|
|
—
|
|
|
4,775.8
|
|
|
—
|
|
|||
Principal payments for long-term debt
|
|
(500.0
|
)
|
|
(6,214.7
|
)
|
|
(659.1
|
)
|
|||
Debt-issuance and debt extinguishment costs
|
|
—
|
|
|
(155.3
|
)
|
|
—
|
|
|||
Proceeds from revolving credit facility
|
|
—
|
|
|
50.0
|
|
|
—
|
|
|||
Repayments of revolving credit facility
|
|
—
|
|
|
(50.0
|
)
|
|
—
|
|
|||
Proceeds from stock issued pursuant to stock-based compensation plans
|
|
15.2
|
|
|
17.5
|
|
|
35.0
|
|
|||
Cash paid for taxes on exercises/vesting of stock-based compensation
|
|
(25.0
|
)
|
|
(23.2
|
)
|
|
(27.4
|
)
|
|||
Payments for repurchase of stock
|
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in financing activities
|
|
(709.8
|
)
|
|
(1,599.9
|
)
|
|
(651.5
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
0.6
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
139.3
|
|
|
(651.1
|
)
|
|
231.4
|
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
|
446.7
|
|
|
1,097.8
|
|
|
866.4
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
|
$
|
586.0
|
|
|
$
|
446.7
|
|
|
$
|
1,097.8
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid for:
|
|
|
|
|
|
|
|
|
|
|||
Interest, net of amounts capitalized
|
|
$
|
170.2
|
|
|
$
|
383.4
|
|
|
$
|
286.5
|
|
Income taxes
|
|
$
|
266.8
|
|
|
$
|
277.5
|
|
|
$
|
552.4
|
|
Non-cash transactions:
|
|
|
|
|
|
|
||||||
Accrued capital expenditures
|
|
$
|
51.1
|
|
|
$
|
43.2
|
|
|
$
|
45.0
|
|
Buildings
|
39 to 40 years
|
Furniture, fixtures and equipment
|
3 to 15 years
|
|
|
February 1,
|
|
February 2,
|
||||
(in millions)
|
|
2020
|
|
2019
|
||||
Accounts receivable, net
|
|
$
|
113.3
|
|
|
$
|
100.9
|
|
Other
|
|
94.9
|
|
|
234.3
|
|
||
Total other current assets
|
|
$
|
208.2
|
|
|
$
|
335.2
|
|
|
|
February 1,
|
|
February 2,
|
||||
(in millions)
|
|
2020
|
|
2019
|
||||
Land
|
|
$
|
233.5
|
|
|
$
|
215.3
|
|
Buildings
|
|
1,395.5
|
|
|
1,300.7
|
|
||
Leasehold improvements
|
|
2,335.1
|
|
|
2,037.4
|
|
||
Furniture, fixtures and equipment
|
|
3,813.2
|
|
|
3,348.7
|
|
||
Construction in progress
|
|
298.6
|
|
|
233.8
|
|
||
Total property, plant and equipment
|
|
8,075.9
|
|
|
7,135.9
|
|
||
Less: accumulated depreciation
|
|
4,194.1
|
|
|
3,690.6
|
|
||
Total property, plant and equipment, net
|
|
$
|
3,881.8
|
|
|
$
|
3,445.3
|
|
|
|
February 1,
|
|
February 2,
|
||||
(in millions)
|
|
2020
|
|
2019
|
||||
Taxes (other than income taxes)
|
|
$
|
183.3
|
|
|
$
|
159.5
|
|
Compensation and benefits
|
|
102.8
|
|
|
122.1
|
|
||
Insurance
|
|
112.0
|
|
|
106.0
|
|
||
Accrued construction costs
|
|
51.1
|
|
|
43.2
|
|
||
Other
|
|
168.8
|
|
|
188.5
|
|
||
Total other current liabilities
|
|
$
|
618.0
|
|
|
$
|
619.3
|
|
|
|
February 1,
|
|
February 2,
|
||||
(in millions)
|
|
2020
|
|
2019
|
||||
Insurance
|
|
$
|
213.6
|
|
|
$
|
221.6
|
|
Other
|
|
44.4
|
|
|
188.3
|
|
||
Total other long-term liabilities
|
|
$
|
258.0
|
|
|
$
|
409.9
|
|
(in millions)
|
|
Dollar Tree
|
|
Family Dollar
|
|
Total
|
||||||
Balance at February 3, 2018
|
|
$
|
347.1
|
|
|
$
|
4,678.1
|
|
|
$
|
5,025.2
|
|
Foreign currency translation adjustments
|
|
(1.6
|
)
|
|
—
|
|
|
(1.6
|
)
|
|||
Goodwill reassignment for re-bannered stores
|
|
31.0
|
|
|
(31.0
|
)
|
|
—
|
|
|||
Goodwill impairment
|
|
—
|
|
|
(2,727.0
|
)
|
|
(2,727.0
|
)
|
|||
Balance at February 2, 2019
|
|
376.5
|
|
|
1,920.1
|
|
|
2,296.6
|
|
|||
Foreign currency translation adjustments
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Goodwill reassignment for re-bannered stores
|
|
47.6
|
|
|
(47.6
|
)
|
|
—
|
|
|||
Goodwill impairment
|
|
—
|
|
|
(313.0
|
)
|
|
(313.0
|
)
|
|||
Balance at February 1, 2020
|
|
$
|
423.8
|
|
|
$
|
1,559.5
|
|
|
$
|
1,983.3
|
|
|
|
Year Ended
|
||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
||||||
(in millions)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Current taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
210.1
|
|
|
$
|
245.6
|
|
|
$
|
439.3
|
|
State
|
|
52.5
|
|
|
47.8
|
|
|
23.8
|
|
|||
Foreign
|
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
|||
Total current taxes
|
|
262.7
|
|
|
293.8
|
|
|
463.4
|
|
|||
Deferred taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
39.2
|
|
|
0.3
|
|
|
(456.0
|
)
|
|||
State
|
|
(5.6
|
)
|
|
(12.3
|
)
|
|
(17.7
|
)
|
|||
Foreign
|
|
(24.6
|
)
|
|
—
|
|
|
—
|
|
|||
Total deferred taxes
|
|
9.0
|
|
|
(12.0
|
)
|
|
(473.7
|
)
|
|||
Provision for income taxes
|
|
$
|
271.7
|
|
|
$
|
281.8
|
|
|
$
|
(10.3
|
)
|
|
|
Year Ended
|
|||||||
|
|
February 1, 2020
|
|
February 2, 2019
|
|
February 3, 2018
|
|||
Statutory U.S. federal income tax (benefit) rate
|
|
21.0
|
%
|
|
(21.0
|
)%
|
|
33.7
|
%
|
Effect of:
|
|
|
|
|
|
|
|||
Goodwill impairment
|
|
6.0
|
|
|
43.7
|
|
|
—
|
|
State and local income taxes, net of federal income tax benefit
|
|
3.7
|
|
|
3.0
|
|
|
2.5
|
|
Work Opportunity Tax Credit
|
|
(2.7
|
)
|
|
(2.0
|
)
|
|
(1.3
|
)
|
Deferred tax rate change
|
|
0.1
|
|
|
—
|
|
|
(0.6
|
)
|
Incremental tax expense (benefit) of exercises/vesting of
equity-based compensation |
|
(0.4
|
)
|
|
0.1
|
|
|
(0.8
|
)
|
Change in valuation allowance
|
|
(2.2
|
)
|
|
0.3
|
|
|
(0.1
|
)
|
Tax Cuts and Jobs Act
|
|
—
|
|
|
(1.3
|
)
|
|
(33.0
|
)
|
Other, net
|
|
(0.8
|
)
|
|
(1.3
|
)
|
|
(1.0
|
)
|
Effective tax (benefit) rate
|
|
24.7
|
%
|
|
21.5
|
%
|
|
(0.6
|
)%
|
(in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
Deferred tax assets:
|
|
|
|
|
||||
Deferred rent
|
|
$
|
—
|
|
|
$
|
44.3
|
|
Operating lease liabilities
|
|
1,621.8
|
|
|
—
|
|
||
Accrued expenses
|
|
26.0
|
|
|
18.0
|
|
||
Net operating losses, interest expense and credit carryforwards
|
|
102.2
|
|
|
90.7
|
|
||
Accrued compensation expense
|
|
31.6
|
|
|
31.6
|
|
||
State tax election
|
|
19.3
|
|
|
20.9
|
|
||
Other
|
|
2.4
|
|
|
3.0
|
|
||
Total deferred tax assets
|
|
1,803.3
|
|
|
208.5
|
|
||
Valuation allowance
|
|
(18.5
|
)
|
|
(42.6
|
)
|
||
Deferred tax assets, net
|
|
1,784.8
|
|
|
165.9
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Property and equipment
|
|
(304.3
|
)
|
|
(235.5
|
)
|
||
Operating lease right-of-use assets
|
|
(1,550.1
|
)
|
|
—
|
|
||
Other intangibles
|
|
(852.2
|
)
|
|
(864.0
|
)
|
||
Inventory
|
|
(14.4
|
)
|
|
(17.8
|
)
|
||
Prepaids
|
|
(24.1
|
)
|
|
(21.8
|
)
|
||
Total deferred tax liabilities
|
|
(2,745.1
|
)
|
|
(1,139.1
|
)
|
||
Deferred income taxes, net
|
|
$
|
(960.3
|
)
|
|
$
|
(973.2
|
)
|
(in millions)
|
|
February 1, 2020
|
|
February 2, 2019
|
||||
Beginning Balance
|
|
$
|
35.4
|
|
|
$
|
43.8
|
|
Additions, based on tax positions related to current year
|
|
0.9
|
|
|
4.6
|
|
||
Additions for tax positions of prior years
|
|
4.8
|
|
|
4.5
|
|
||
Settlements
|
|
—
|
|
|
(2.2
|
)
|
||
Lapses in statutes of limitation
|
|
(12.2
|
)
|
|
(15.3
|
)
|
||
Ending balance
|
|
$
|
28.9
|
|
|
$
|
35.4
|
|
|
|
February 1, 2020
|
|
February 2, 2019
|
||||||||||||
(in millions)
|
|
Principal
|
|
Unamortized Debt Discount, Premium and Issuance Costs
|
|
Principal
|
|
Unamortized Debt Discount, Premium and Issuance Costs
|
||||||||
5.00% Senior Notes, due 2021
|
|
$
|
300.0
|
|
|
$
|
(2.4
|
)
|
|
$
|
300.0
|
|
|
$
|
(4.6
|
)
|
$1.25 billion Revolving Credit Facility, interest
payable at LIBOR, reset periodically, plus
1.25%, which was 2.91% at February 1, 2020
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|
10.2
|
|
||||
Senior Floating Rate Notes, due 2020, interest
payable at LIBOR, reset quarterly, plus 0.70%,
which was 2.45% at February 1, 2020
|
|
250.0
|
|
|
0.2
|
|
|
750.0
|
|
|
3.2
|
|
||||
3.70% Senior Notes, due 2023
|
|
1,000.0
|
|
|
5.9
|
|
|
1,000.0
|
|
|
7.5
|
|
||||
4.00% Senior Notes, due 2025
|
|
1,000.0
|
|
|
6.2
|
|
|
1,000.0
|
|
|
7.2
|
|
||||
4.20% Senior Notes, due 2028
|
|
1,250.0
|
|
|
10.2
|
|
|
1,250.0
|
|
|
11.2
|
|
||||
Total
|
|
$
|
3,800.0
|
|
|
$
|
27.8
|
|
|
$
|
4,300.0
|
|
|
$
|
34.7
|
|
2020
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
||||||||||||
$
|
250.0
|
|
$
|
300.0
|
|
$
|
—
|
|
$
|
1,000.0
|
|
$
|
—
|
|
$
|
2,250.0
|
|
|
|
Year Ended
|
||
(in millions)
|
|
February 1, 2020
|
||
Operating lease cost
|
|
$
|
1,520.5
|
|
Variable lease cost
|
|
375.9
|
|
|
Short-term lease cost
|
|
14.8
|
|
|
Total lease cost*
|
|
$
|
1,911.2
|
|
|
|
|
||
*Excludes sublease income, which is immaterial
|
Weighted-average remaining lease term (years)
|
|
6.4
|
|
Weighted-average discount rate
|
|
4.3
|
%
|
|
|
Year Ended
|
||
(in millions)
|
|
February 1, 2020
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
1,433.4
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
|
1,286.1
|
|
|
|
(in millions)
|
||
2019
|
|
$
|
1,435.9
|
|
2020
|
|
1,176.7
|
|
|
2021
|
|
1,100.0
|
|
|
2022
|
|
899.6
|
|
|
2023
|
|
729.1
|
|
|
Thereafter
|
|
1,966.3
|
|
|
Total minimum lease payments
|
|
$
|
7,307.6
|
|
|
|
February 1, 2020
|
|
February 2, 2019
|
||||||||||||
(in millions)
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Level 1
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes
|
|
$
|
4,064.5
|
|
|
$
|
3,779.9
|
|
|
$
|
4,198.6
|
|
|
$
|
4,275.5
|
|
|
|
Year Ended
|
||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
||||||
(in millions, except per share data)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Basic net income (loss) per share:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
827.0
|
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
Weighted average number of shares outstanding
|
|
237.2
|
|
|
237.9
|
|
|
236.8
|
|
|||
Basic net income (loss) per share
|
|
$
|
3.49
|
|
|
$
|
(6.69
|
)
|
|
$
|
7.24
|
|
Diluted net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
827.0
|
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
Weighted average number of shares outstanding
|
|
237.2
|
|
|
237.9
|
|
|
236.8
|
|
|||
Dilutive effect of stock options and restricted stock (as determined by
applying the treasury stock method) |
|
1.1
|
|
|
—
|
|
|
0.9
|
|
|||
Weighted average number of shares and dilutive potential shares
outstanding |
|
238.3
|
|
|
237.9
|
|
|
237.7
|
|
|||
Diluted net income (loss) per share
|
|
$
|
3.47
|
|
|
$
|
(6.69
|
)
|
|
$
|
7.21
|
|
|
|
Year Ended
|
||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
||||||
(in millions)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Cost of sales
|
|
$
|
8.1
|
|
|
$
|
8.7
|
|
|
$
|
7.8
|
|
Selling, general and administrative expenses
|
|
17.0
|
|
|
32.7
|
|
|
45.1
|
|
|||
Total
|
|
$
|
25.1
|
|
|
$
|
41.4
|
|
|
$
|
52.9
|
|
•
|
20% after two years of service
|
•
|
40% after three years of service
|
•
|
60% after four years of service
|
•
|
100% after five years of service
|
|
|
Year Ended
|
||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
||||||
(in millions)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Cost of sales
|
|
$
|
12.9
|
|
|
$
|
12.1
|
|
|
$
|
12.8
|
|
Selling, general and administrative expenses
|
|
48.5
|
|
|
51.2
|
|
|
53.0
|
|
|||
Total stock-based compensation expense
|
|
$
|
61.4
|
|
|
$
|
63.3
|
|
|
$
|
65.8
|
|
Excess tax benefit (deficit) on stock-based compensation
recognized in the Provision for income taxes
|
|
$
|
3.8
|
|
|
$
|
(1.3
|
)
|
|
$
|
13.6
|
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at February 2, 2019
|
|
1,364,689
|
|
|
$
|
87.23
|
|
Granted
|
|
490,930
|
|
|
103.55
|
|
|
Vested
|
|
(651,611
|
)
|
|
85.17
|
|
|
Forfeited
|
|
(154,927
|
)
|
|
89.72
|
|
|
Nonvested at February 1, 2020
|
|
1,049,081
|
|
|
$
|
95.17
|
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at February 2, 2019
|
|
81,411
|
|
|
$
|
82.46
|
|
Granted
|
|
281,303
|
|
|
103.71
|
|
|
Vested
|
|
(38,502
|
)
|
|
86.43
|
|
|
Forfeited
|
|
(3,712
|
)
|
|
80.02
|
|
|
Nonvested at February 1, 2020
|
|
320,500
|
|
|
$
|
99.29
|
|
|
|
Number of Shares
|
|
Weighted Average Per Share Exercise Price
|
|
Weighted Average Remaining Term
|
|
Aggregate Intrinsic Value
(in millions)
|
|||||
Outstanding, beginning of period
|
|
367,196
|
|
|
$
|
76.17
|
|
|
|
|
|
||
Granted
|
|
6,537
|
|
|
105.45
|
|
|
|
|
|
|||
Exercised
|
|
(73,383
|
)
|
|
79.23
|
|
|
|
|
|
|||
Forfeited
|
|
(94,457
|
)
|
|
74.05
|
|
|
|
|
|
|||
Outstanding, end of period
|
|
205,893
|
|
|
$
|
76.87
|
|
|
2.94
|
|
$
|
2.3
|
|
Options vested and exercisable at February 1,
2020 |
|
205,893
|
|
|
$
|
76.87
|
|
|
2.94
|
|
$
|
2.3
|
|
|
|
Year Ended
|
||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
||||||
(in millions)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
||||||
Net sales:
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
12,507.9
|
|
|
$
|
11,712.1
|
|
|
$
|
11,164.4
|
|
Family Dollar
|
|
11,102.9
|
|
|
11,111.2
|
|
|
11,081.1
|
|
|||
Consolidated Net sales
|
|
$
|
23,610.8
|
|
|
$
|
22,823.3
|
|
|
$
|
22,245.5
|
|
|
|
|
|
|
|
|
||||||
Gross profit:
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
4,342.9
|
|
|
$
|
4,137.5
|
|
|
$
|
3,998.5
|
|
Family Dollar
|
|
2,697.8
|
|
|
2,810.0
|
|
|
3,023.4
|
|
|||
Consolidated Gross profit
|
|
$
|
7,040.7
|
|
|
$
|
6,947.5
|
|
|
$
|
7,021.9
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
1,657.8
|
|
|
$
|
1,645.9
|
|
|
$
|
1,616.8
|
|
Family Dollar
|
|
(81.0
|
)
|
|
(2,320.0
|
)
|
|
630.0
|
|
|||
Corporate and support
|
|
(314.6
|
)
|
|
(265.4
|
)
|
|
(247.7
|
)
|
|||
Consolidated Operating income (loss)
|
|
1,262.2
|
|
|
(939.5
|
)
|
|
1,999.1
|
|
|||
Interest expense, net
|
|
162.1
|
|
|
370.0
|
|
|
301.8
|
|
|||
Other expense (income), net
|
|
1.4
|
|
|
(0.5
|
)
|
|
(6.7
|
)
|
|||
Income (loss) before income taxes
|
|
$
|
1,098.7
|
|
|
$
|
(1,309.0
|
)
|
|
$
|
1,704.0
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense:
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
277.7
|
|
|
$
|
254.0
|
|
|
$
|
241.1
|
|
Family Dollar
|
|
339.1
|
|
|
346.5
|
|
|
356.1
|
|
|||
Corporate and support
|
|
28.9
|
|
|
20.9
|
|
|
14.3
|
|
|||
Consolidated depreciation and amortization expense
|
|
$
|
645.7
|
|
|
$
|
621.4
|
|
|
$
|
611.5
|
|
|
|
As of
|
||||||
|
|
February 1,
|
|
February 2,
|
||||
(in millions)
|
|
2020
|
|
2019
|
||||
Consolidated Balance Sheet Data:
|
|
|
|
|
||||
Goodwill:
|
|
|
|
|
||||
Dollar Tree
|
|
$
|
423.8
|
|
|
$
|
376.5
|
|
Family Dollar
|
|
1,559.5
|
|
|
1,920.1
|
|
||
Consolidated Goodwill
|
|
$
|
1,983.3
|
|
|
$
|
2,296.6
|
|
|
|
|
|
|
||||
Total assets:
|
|
|
|
|
||||
Dollar Tree
|
|
$
|
7,694.0
|
|
|
$
|
3,992.6
|
|
Family Dollar
|
|
11,484.9
|
|
|
9,144.7
|
|
||
Corporate and support
|
|
395.7
|
|
|
363.9
|
|
||
Consolidated Total assets
|
|
$
|
19,574.6
|
|
|
$
|
13,501.2
|
|
|
|
|
|
|
||||
Additions to property, plant and equipment:
|
|
|
|
|
||||
Dollar Tree
|
|
$
|
547.5
|
|
|
$
|
455.6
|
|
Family Dollar
|
|
425.2
|
|
|
251.0
|
|
||
Corporate and support
|
|
62.1
|
|
|
110.5
|
|
||
Consolidated additions to property, plant and equipment
|
|
$
|
1,034.8
|
|
|
$
|
817.1
|
|
|
|
Year Ended
|
|||||||||||||||||||
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
|||||||||||||||
(in millions)
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
Dollar Tree segment net sales by
merchandise category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consumable
|
|
$
|
6,155.3
|
|
|
49.2
|
%
|
|
$
|
5,703.8
|
|
|
48.7
|
%
|
|
$
|
5,470.6
|
|
|
49.0
|
%
|
Variety
|
|
5,732.1
|
|
|
45.8
|
%
|
|
5,457.8
|
|
|
46.6
|
%
|
|
5,169.1
|
|
|
46.3
|
%
|
|||
Seasonal
|
|
620.5
|
|
|
5.0
|
%
|
|
550.5
|
|
|
4.7
|
%
|
|
524.7
|
|
|
4.7
|
%
|
|||
Total Dollar Tree segment net sales
|
|
$
|
12,507.9
|
|
|
100.0
|
%
|
|
$
|
11,712.1
|
|
|
100.0
|
%
|
|
$
|
11,164.4
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Family Dollar segment net sales by
merchandise category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consumable
|
|
$
|
8,604.7
|
|
|
77.5
|
%
|
|
$
|
8,466.7
|
|
|
76.2
|
%
|
|
$
|
8,344.1
|
|
|
75.3
|
%
|
Home products
|
|
866.0
|
|
|
7.8
|
%
|
|
911.1
|
|
|
8.2
|
%
|
|
930.8
|
|
|
8.4
|
%
|
|||
Apparel and accessories
|
|
644.0
|
|
|
5.8
|
%
|
|
700.0
|
|
|
6.3
|
%
|
|
731.3
|
|
|
6.6
|
%
|
|||
Seasonal and electronics
|
|
988.2
|
|
|
8.9
|
%
|
|
1,033.4
|
|
|
9.3
|
%
|
|
1,074.9
|
|
|
9.7
|
%
|
|||
Total Family Dollar segment net sales
|
|
$
|
11,102.9
|
|
|
100.0
|
%
|
|
$
|
11,111.2
|
|
|
100.0
|
%
|
|
$
|
11,081.1
|
|
|
100.0
|
%
|
(dollars in millions, except diluted net income (loss) per share data)
|
|
First
Quarter1
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter1
|
||||||||
Fiscal 2019:
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
5,808.7
|
|
|
$
|
5,740.6
|
|
|
$
|
5,746.2
|
|
|
$
|
6,315.3
|
|
Gross profit
|
|
$
|
1,727.2
|
|
|
$
|
1,648.5
|
|
|
$
|
1,704.5
|
|
|
$
|
1,960.5
|
|
Operating income2,3
|
|
$
|
385.5
|
|
|
$
|
268.9
|
|
|
$
|
358.4
|
|
|
$
|
249.4
|
|
Net income2,3,4
|
|
$
|
267.9
|
|
|
$
|
180.3
|
|
|
$
|
255.8
|
|
|
$
|
123.0
|
|
Diluted net income per share2,3,4
|
|
$
|
1.12
|
|
|
$
|
0.76
|
|
|
$
|
1.08
|
|
|
$
|
0.52
|
|
Stores open at end of quarter
|
|
15,264
|
|
|
15,115
|
|
|
15,262
|
|
|
15,288
|
|
||||
Comparable store net sales change
|
|
2.2
|
%
|
|
2.4
|
%
|
|
2.5
|
%
|
|
0.4
|
%
|
||||
Fiscal 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
|
$
|
5,553.7
|
|
|
$
|
5,525.6
|
|
|
$
|
5,538.8
|
|
|
$
|
6,205.2
|
|
Gross profit5
|
|
$
|
1,699.6
|
|
|
$
|
1,663.9
|
|
|
$
|
1,671.9
|
|
|
$
|
1,912.1
|
|
Operating income (loss)2,5,6,7
|
|
$
|
437.6
|
|
|
$
|
382.5
|
|
|
$
|
387.8
|
|
|
$
|
(2,147.4
|
)
|
Net income (loss)2,5,6,7
|
|
$
|
160.5
|
|
|
$
|
273.9
|
|
|
$
|
281.8
|
|
|
$
|
(2,307.0
|
)
|
Diluted net income (loss) per share2,5,6,7
|
|
$
|
0.67
|
|
|
$
|
1.15
|
|
|
$
|
1.18
|
|
|
$
|
(9.69
|
)
|
Stores open at end of quarter
|
|
14,957
|
|
|
15,073
|
|
|
15,187
|
|
|
15,237
|
|
||||
Comparable store net sales change
|
|
1.4
|
%
|
|
1.8
|
%
|
|
1.0
|
%
|
|
2.4
|
%
|
(a)
|
Amounts represent outstanding options, restricted stock units and deferred (“phantom”) shares as of February 1, 2020.
|
(b)
|
Not included in the calculation of weighted-average exercise price are (i) 1,369,581 restricted stock units and (ii) 188,948 deferred shares.
|
(c)
|
Amounts represent shares remaining available for future awards under all of our equity-based plans, including shares remaining under our qualified Employee Stock Purchase Plan and our 2013 Director Deferred Compensation Plan. Out of the 20,077,827 shares remaining available for future issuance, 2,852,398 represent the number of shares remaining available for future issuance under our Employee Stock Purchase Plan as of February 1, 2020.
|
1
|
Equity-based plans approved by our shareholders include: the 2003 Non-Employee Director Stock Option Plan, the 2013 Director Deferred Compensation Plan, the 2015 Employee Stock Purchase Plan (which replaced a predecessor plan), and the Omnibus Incentive Plan (which replaced the 2003 Equity Incentive Plan and the 2004 Executive Officer Equity Plan.
|
2
|
Does not include 105,895 shares to be issued upon the exercise of options with a weighted-average exercise price of $76.97 that were granted under the 2006 Incentive Plan assumed by us in connection with our merger with Family Dollar.
|
1.
|
Documents filed as part of this report:
|
1.
|
Financial Statements. Reference is made to the Index to the Consolidated Financial Statements set forth under Part II, Item 8 of this Form 10-K.
|
2.
|
Financial Statement Schedules. All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions, are not applicable, or the information is included in the Consolidated Financial Statements, and therefore have been omitted.
|
3.
|
Exhibits. The following exhibits are filed as part of, or incorporated by reference into, this report.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
2.1
|
|
|
8-K
|
|
2.1
|
|
7/29/2014
|
|
|
|
2.2
|
|
|
8-K
|
|
2.1
|
|
9/5/2014
|
|
|
|
3.1
|
|
|
8-K
|
|
3.1
|
|
6/21/2013
|
|
|
|
3.2
|
|
|
8-K
|
|
3.1
|
|
3/6/2019
|
|
|
|
4.1
|
|
|
8-K
|
|
4.1
|
|
3/13/2008
|
|
|
|
4.2.1
|
|
|
S-3 ASR
|
|
4.1
|
|
4/2/2018
|
|
|
|
4.2.2
|
|
|
8-K
|
|
4.1
|
|
4/20/2018
|
|
|
|
4.3
|
|
|
|
|
|
|
|
|
X
|
|
10.1
|
*
|
|
8-K
|
|
10.1
|
|
2/3/2005
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
10.2
|
*
|
|
8-K
|
|
10.1
|
|
3/20/2007
|
|
|
|
10.3
|
*
|
|
8-K
|
|
10.5
|
|
1/23/2008
|
|
|
|
10.4
|
*
|
|
8-K
|
|
N/A
|
|
1/23/2008
|
|
|
|
10.5
|
*
|
|
8-K
|
|
10.5
|
|
3/3/2008
|
|
|
|
10.6.1
|
*
|
|
8-K
|
|
10.1
|
|
12/5/2008
|
|
|
|
10.6.2
|
*
|
|
8-K
|
|
10.1
|
|
10/11/2011
|
|
|
|
10.7
|
*
|
|
10-Q
|
|
10.1
|
|
5/19/2011
|
|
|
|
10.8.1
|
*
|
|
8-K
|
|
10.1
|
|
6/22/2011
|
|
|
|
10.8.2
|
*
|
|
10-Q
|
|
10.1
|
|
9/2/2016
|
|
|
|
10.8.3
|
*
|
|
10-Q
|
|
10.1
|
|
8/29/2019
|
|
|
|
10.9
|
*
|
|
8-K
|
|
10.4
|
|
6/22/2011
|
|
|
|
10.10
|
*
|
|
8-K
|
|
10.1
|
|
3/21/2012
|
|
|
|
10.11
|
*
|
|
8-K
|
|
10.2
|
|
3/21/2012
|
|
|
|
10.12
|
*
|
|
10-K
|
|
10.32
|
|
3/27/2019
|
|
|
|
10.13
|
*
|
|
10-K
|
|
10.33
|
|
3/27/2019
|
|
|
|
10.14
|
*
|
|
10-K
|
|
10.34
|
|
3/27/2019
|
|
|
|
10.15
|
*
|
|
10-Q
|
|
10.2
|
|
8/16/2012
|
|
|
|
10.16
|
*
|
|
10-Q
|
|
10.2
|
|
8/22/2013
|
|
|
|
10.17
|
*
|
|
S-8
|
|
4.0
|
|
10/28/2015
|
|
|
|
10.18
|
*
|
|
8-K
|
|
10.1
|
|
10/15/2012
|
|
|
|
10.19
|
*
|
|
10-K
|
|
10.36
|
|
10/19/2012
|
|
|
|
10.20
|
*
|
|
10-Q
|
|
10.3
|
|
6/9/2016
|
|
|
|
10.21
|
*
|
|
10-K
|
|
10.54
|
|
3/28/2017
|
|
|
|
10.22
|
*
|
|
10-K
|
|
10.55
|
|
3/28/2017
|
|
|
|
|
|
DOLLAR TREE, INC.
|
|
|
|
|
DATE:
|
March 20, 2020
|
By:
|
/s/ Gary Philbin
|
|
|
Gary Philbin
|
|
|
|
Chief Executive Officer
|
Signature
|
Title
|
Date
|
|
|
|
/s/ Gary Philbin
|
|
|
Gary Philbin
|
Director and Chief Executive Officer
|
March 20, 2020
|
|
(principal executive officer)
|
|
|
|
|
/s/ Bob Sasser
|
|
|
Bob Sasser
|
Executive Chairman; Director
|
March 20, 2020
|
|
|
|
/s/ Gregory M. Bridgeford
|
|
|
Gregory M. Bridgeford
|
Lead Independent Director
|
March 20, 2020
|
|
|
|
/s/ Arnold S. Barron
|
|
|
Arnold S. Barron
|
Director
|
March 20, 2020
|
|
|
|
/s/ Thomas W. Dickson
|
|
|
Thomas W. Dickson
|
Director
|
March 20, 2020
|
|
|
|
/s/ Conrad M. Hall
|
|
|
Conrad M. Hall
|
Director
|
March 20, 2020
|
|
|
|
/s/ Lemuel E. Lewis
|
|
|
Lemuel E. Lewis
|
Director
|
March 20, 2020
|
|
|
|
/s/ Kathleen E. Mallas
|
|
|
Kathleen E. Mallas
|
Senior Vice President - Principal Accounting Officer
|
March 20, 2020
|
|
(principal accounting officer)
|
|
|
|
|
/s/ Jeffrey Naylor
|
|
|
Jeffrey Naylor
|
Director
|
March 20, 2020
|
|
|
|
/s/ Thomas A. Saunders III
|
|
|
Thomas A. Saunders III
|
Director
|
March 20, 2020
|
|
|
|
/s/ Stephanie Stahl
|
|
|
Stephanie Stahl
|
Director
|
March 20, 2020
|
|
|
|
/s/ Kevin S. Wampler
|
|
|
Kevin S. Wampler
|
Chief Financial Officer
|
March 20, 2020
|
|
(principal financial officer)
|
|
|
|
|
/s/ Carrie A. Wheeler
|
|
|
Carrie A. Wheeler
|
Director
|
March 20, 2020
|
|
|
|
/s/ Thomas E. Whiddon
|
|
|
Thomas E. Whiddon
|
Director
|
March 20, 2020
|
|
|
|
/s/ Dr. Carl P. Zeithaml
|
|
|
Dr. Carl P. Zeithaml
|
Director
|
March 20, 2020
|
•
|
terms of redemption (including sinking fund provisions), redemption price or prices; and
|
•
|
the number of shares constituting any series of preferred stock (up to the maximum of 10,000,000 shares in the aggregate).
|
•
|
shareholder approval of a plan of merger or share exchange;
|
•
|
shareholder approval of a sale, lease, exchange or other disposition of the Company’s assets, other than certain dispositions that would leave the Company without a “significant continuing business activity;”
|
•
|
shareholder approval of a plan of domestication;
|
•
|
shareholder approval of a plan of entity conversion; or
|
•
|
shareholder approval of a proposal for dissolution of the corporation.
|
•
|
Our bylaws provide that shareholder nominations of persons for election to the board of directors may be made only upon advance written notice to the board of directors in accordance with certain procedural requirements.
|
•
|
A shareholder is not eligible to have its director nominees included in the Company’s proxy statement for the annual meeting of shareholders unless it meets certain notice and procedural requirements, including (i) continuous ownership for at least three years of at least three per cent of the outstanding shares of stock entitled to vote in the election of directors, (ii) the aggregate number of shareholders whose stock ownership is counted for the purpose of satisfying the ownership requirement does not exceed twenty, and (iii) the maximum number of shareholder nominees may not exceed the greater of two directors or twenty per cent of the number of directors then in office.
|
•
|
The articles of incorporation provide that a director may be removed only if the number of votes cast to remove the director constitutes a majority of the votes entitled to be cast at an election of directors.
|
•
|
The authorization of undesignated preferred stock in our articles of incorporation makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of the Company.
|
•
|
Our articles of incorporation do not give the shareholders the right to cumulative voting in the election of directors. The absence of cumulative voting makes it more difficult for a minority shareholder to gain a seat on our board of directors or influence our board of directors’ decision regarding a takeover.
|
•
|
Our bylaws provide that special meetings of shareholders may be called only by the board of directors, the chairman of the board of directors or the chief executive officer, and that no business shall be transacted and no corporate action may be taken at a special meeting of shareholders other than that stated in the notice of the meeting.
|
•
|
The bylaws also provide that the only business that may be brought before an annual meeting of shareholders is limited to matters (i) brought before the meeting at the
|
•
|
a majority (but not less than two) of the disinterested directors of the corporation and the holders of two-thirds of the voting shares, other than the shares beneficially owned by the interested shareholder, approve the affiliated transaction, or
|
•
|
before the date the person became an interested shareholder, a majority of the disinterested directors of the corporation approved the transaction that resulted in the shareholder becoming an interested shareholder.
|
•
|
the voting rights are granted by a majority vote of all outstanding shares other than those held by the acquiring person or any officer or employee director of the corporation, or
|
•
|
the articles of incorporation or bylaws of the corporation provide that these Virginia law provisions do not apply to acquisitions of its shares. The acquiring person may require that a special meeting of the shareholders be held to consider the grant of voting rights to the shares acquired in the control share acquisition.
|
DUNCAN MAC NAUGHTON
|
|
DOLLAR TREE, INC.
|
||
Signature:
|
/s/ Duncan Mac Naughton
|
|
By
|
/s/ Gary M. Philbin
|
|
|
|
Name:
|
Gary M. Philbin
|
Date:
|
December 19, 2019
|
|
Title:
|
Chief Executive Officer
|
|
|
|
Date:
|
December 22, 2019
|
Subsidiary Name
|
|
State or Jurisdiction of Incorporation
|
|
D/B/A
|
Dollar Tree Stores, Inc.
|
|
Virginia
|
|
Dollar Tree
|
Dollar Tree Management, LLC
|
|
Virginia
|
|
N/A
|
Family Dollar Stores, Inc. (1)
|
|
Delaware
|
|
Family Dollar
|
Family Dollar, Inc. (1)
|
|
North Carolina
|
|
Family Dollar
|
Family Dollar Merchandising, LLC
|
|
Delaware
|
|
N/A
|
Family Dollar Services, LLC
|
|
North Carolina
|
|
N/A
|
Family Dollar Stores of Ohio, Inc. (1)
|
|
Virginia
|
|
Family Dollar
|
Greenbrier International, Inc.
|
|
Delaware
|
|
N/A
|
Dollar Tree Distribution, Inc.
|
|
Virginia
|
|
N/A
|
Dollar Tree Insurance, Inc.
|
|
South Carolina
|
|
N/A
|
Dollar Tree Stores Canada, Inc. (2)
|
|
British Columbia
|
|
Dollar Tree Canada
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Gary Philbin
|
|
Gary Philbin
|
|
Chief Executive Officer
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Kevin S. Wampler
|
|
Kevin S. Wampler
|
|
Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 20, 2020
|
/s/ Gary Philbin
|
Date
|
Gary Philbin
|
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 20, 2020
|
/s/ Kevin S. Wampler
|
Date
|
Kevin S. Wampler
|
|
Chief Financial Officer
|